Profits at insurance and reinsurance firm Allied World dropped by more than $50 million for the first quarter.

Allied World had a net income of $74.1 million for the first three months this year, down from $124.4 million in the same quarter the previous year.

The drop was offset by a 19.5 per cent increase in investment income over the same period, up to $53.3 million from the $44.6 million recorded for the first quarter of 2015.

Allied World president and CEO Scott Carmilani said: “We’re pleased at the positive contribution from our investment portfolio and solid underwriting results this quarter.

“Although market conditions remain challenging, we continue to find attractive opportunities while maintaining our strong focus on risk selection and capital management.”

The earnings for the first quarter in 2016 is equivalent to 81 cents per share, compared to the $1.27 per share for the same period the year before.

The firm, which is headquartered in Switzerland but has substantial operations in Bermuda, recorded gross premiums of $863.5 million, down 1.9 per cent on the $880.6 million recorded in the same quarter last year.

The firm’s report said: “This was driven by a decline in the reinsurance segment, partially offset by growth in the global markets insurance segment.

“North American insurance was essentially flat.

“The global markets insurance segment grew by 94.7 per cent on a constant dollar basis and 90.96 per cent per cent on an as reported basis, driven by the inclusion of the acquired Asian operations.”

Allied World’s reinsurance segment dropped 16 per cent, which the company attributed to a reduction in property catastrophe risk and the non-renewal of other property and casualty treaties.

Total shareholder equity at the end of the first quarter totalled $3.53 billion, in line with the end of the first quarter in 2015.